Young Urologists Forum

1. Young Urologists Forum Effectively Managing Practice Economics and Utilization of Physician Extenders Program and Lunch sponsored by the Young Urologists Committee and Ortho-McNeil Pharmaceutical, Inc.

2. Changing Patterns of Reimbursement, can your practice adapt? Paul Brower CEO Orange County Urology Associates Fees used in this presentation are based on the Medicare allowables in California. These fees are on the public record and no proprietary information is included in this presentation.

3. Reimbursement History • Began with the creation of the Resource-Based Relative Value Scale[RBRVS] by Wm Hsiao in 1988 and adopted by HICFA as part of the Omnibus Budget Reconciliation Act in1992. • This allowed a shift to reward “cognitive” skills vs. procedures particularly those performed in the hospital. • The system of CPT codes,DRGs,and RVUs was created • There have been 3500 corrections and additions since 1992 • By manipulating the RVUs and place of service there has been a successful shift to the office for procedures from the more expensive hospital

4. Yotan,YJ.Urology,Vol.172,1958-1962,Nov.2004 • Between 1995 and 2004 the reimbursement for E & M codes increased 51% and surgical fees decreased 28% • Reimbursement for office procedures has risen even more than the increase in E & M codes

5. Where we are today? • Medicare has indicated they will reduce reimbursement an additional 40% over the next 7 years. A 5% cut was frozen in 2007,but the freeze was “paid for” by imaging cuts including a 40% cut in reimbursement for transrectal ultrasound guidance for prostate biopsy. • Most HMO and PPO contracts are quoted as a % of Medicare’s fee schedule so this will a have profound effect on your practice income • Consolidation of Insurers has lead to concentration of power in the hands of a few resulting in obscene profits • Blue Cross of CA[now Anthem]- $3billion • United Health+Pacific Care-$4billion

6. What can we do ? • In today’s economic environment we must understand how and where we make our money. • Gone are the days when we could simply come to work, operate, see patients, have someone run our office and expect to get paid well each month. • There has been tremendous pressure on our income in the last 5 years. • Costs associated with running our practices have risen and reimbursements have fallen. • We are “piece workers” and the only thing we have to sell is our time • We get paid for the number of widgets we produce and this is hard to leverage • If you don’t understand where you make your money you can’t possibly maximize your production and income per unit of time spent

7. What we look at for our practice benchmarking • Office Patient Counts: New patients,Return visits,# days seeing patients,#procedures done,ratio of procedures per patient visit,procedures that require a procedure room[vas,bx,utc,cysto] Collections total and average per patient visit[always use collections not billings] Coding:level and ratio for each MD and compared to the group • Hospital # Consultations # OR Cases # Case as Assistant # Long Cases[> 2 1/2 hrs] Ratio of OR cases patient[Total, New] Collections from the OR and Hospital

8. OCUA for 2005 • 9 MDs • 1 new assoc. doing the laparoscopy and building his practice[#9] • 2 specializing in female and incontinence[#4,500] • 1 male infertility specialist[#400] • 1 CEO,seeing patients 1/2 time[#100]

9. Approximate revenues per partner

10. Office Patient Visits

11. OR Cases

12. % Total Collections-OR

13. Income from surgery versus office encounter

14. OCUA 2006 Stats • 6,323 New Patients • 17,803 Return Visits • 24,126 MD - patient encounters • 2,000 Surgical Cases • 13,200 Office Procedures • 9 MDs [1new associate and 1 working 1/2 time]

15. Collections 2006 • Office Patients Visits 31% • Office Procedures 39% • Surgery 16% • Other[supplies,meds] 13%

16. Comparative Fees 1986* 2007 TURP $2000 $923 Rad.Neph $3000 $1452 Lap Rad Neph $1536 Rad.Cystectomy $4000 $2185 Ureteroscopy,laser $488 ESL $2500 $639 Rad Px $3500 $1635 Pathology Prostate bx $144/specimen Cytology $95 *Balance Billing allowed then and not now

17. Office Fees 2007 • Office consult[99244] $223 • Return Visit[99213] $76 • Cystoscopy[52000] $283 • Vasectomy[55250] $742 • TUMT[53850] $5214 • BT<0.5cm[52224] $1992 • Prostate Biopsy[55700] $335 • Prostate US[76872] $176 • Video Urodynamics $800-1000 • Renal US[76770] $168

19. Another Day in the Office - 03/08/2007

20. Ultrasound • In office US is a very good way to leverage your time • US tech comes to the office on regular basis and performs renal,scrotal,penile,color doppler studies • Most Urologists are already doing their own US of the prostate Advantages • Does not require dedicated space • Cost of equipment nominal compared to other imaging • Personnel costs are limited[pay per procedure] • Enhanced patient service and satisfaction • Does not require separate contracting with radiologist

21. US Codes and Fees CPT Code Description Fee 51798 PVR $21 76770 Retroperitoneal[complete] $142 76775 Retroperitoneal[limited] $127 76856 Pelvic[complete] $122 76857 Pelvic[limited] $110 76872 Prostate-Transrectal[Bx supervision] $147 76942 Guidance for biopsy $189 55700 Biopsy prostate $145 76873 Prostate Vol. BrachyRx $195 76870 Scrotal & Contents $120 93976 Duplex Scan[limited] $305 93980 Duplex Scan-penile $232

22. Pathology • Must be very careful of the structure to avoid Stark issues;must own the equipment,own or lease the space,formal contract with the pathologist. • Bill global fee and split collections per contract with the pathologist • Requires limited dedicated space and funds for equipment:200 sq.ft,$80-$100,000 • We are only doing 2 tests tissue histopathology,urine cytology • Medicare fees • CPT Description Fee • 88305 Surgical Path[gross & micro] $143/core 88108 Urine Cytology $95

23. PATHOLOGY LAB

24. CT • Must lease or purchase the equipment[new or refurbished].Start up costs $300-$600,000 • Must have contractual arrangement with radiologist to interpret [on the premises or via PACs system].Bill separately or global. • Requires CT tech and MD to inject contrast • Dedicated space,construction,inspection,license • Certificate of Need[CON] • Pre-certification for procedures • Radiologists and some payors resisting this at the state and federal levels

25. CT Pro forma * • Revenue • CT Patients per day 6 • Days per month 20.75 • Rev/pt- Abd/pelvis $835[may be considerably less] with & without contrast • Total Revenue $1,248,252 • Expenses • Equipment lease $85,000 • Service contract $65,000 • Technologist[SOCA] $85,000 • Radiologist[16% of global[ $200,000 • Medical supplies $10,000 • Misc[rent,utilities] $20,000 • Total $465,000 • Potential Cash Flow $783,252 * Hypothetical Pro forma from Neusoft Imaging Systems Solutions[modified by PAB]

26. How can you adapt ? • Office is the center for income and expenses-keep it busy. Have the space,equipment,staff to be maximally efficient with your time • Build a grid based on 1/2 day blocks-don’t violate your office block to go to the OR[it costs you lots of money]. Use block time • Develop ancillary sources of income US,Lithotripsy,CT,Pathology,IMRT,Incontinence Center • Built 15,000 sq. ft. office with 23 exam/procedure rooms,pathology lab,research,color doppler US,2 urodynamic rooms,C-arm and flouro table • Must finds ways to leverage your time • Little things matter: • Communicate by email, assign hospitals rounds,whomever is in the hospital sees all of the patients there,who ever lives closest stops in the AM • Review the schedule weekly,look for conflicts,openings,inefficiencies • Try to use RNFA or retired surgeons to assist,utilize surgical blocks

27. Working smarter and being more productive • Designing your office This is where you make your money and where your fixed costs are Our new office:15,000 sq. ft 23 exam and procedure rooms;2 urodynamics,nurse visit room,fluoroscopy,Clinical Research,Pathology Lab 7 MDs and 2 PAs working simultaneously Designed to never have to defer a procedure or delay seeing patients • Location Primary office should be geocentric to the primary hospitals served Satellite offices-utilize them only if they bring in patients that would go to someone else if you weren’t there. They are expensive and inefficient

28. Size Really Does Matter • Group Size Minimum # MDs - 6 Maximum - None [the larger the group the more potential problems with governance and personalities] Large groups have access to capital for wholly owned ancillary services-lithotripters,laser,CT,IMRT • Fixed Costs Most practice costs are fixed[rent,staff] They don’t go away when you aren’t there 6 MDs -3 or 4 working in the office all of the time Critical mass is required for capital expenses and overhead • RecruitingLarge groups have been successful,small practices have not Fellowship trained MDs want larger groups Large groups can support the sub specialist with patient referrals and financial subsidies

29. Office vs OR • Office is where you make your money-85% for OCUA • Office procedures are the economic kicker • The $ penalty for the OR is lost income of 1/3 to 20x per unit of time • Don’t stop operating but organize your time • Use block time • Don’t schedule cases in the middle of the day • Office days are office days-don’t leave • Rotate days in the hospital[rounds,operate,call] • Economic Death Assisting- getting paid $175 for 1/2 day in the OR Track assists and compensate your partners Try not to use associates [use RNFA,retired surgeons]

30. Conclusions • Do Internal Bench Marking at least annually • The majority of income comes from the office [85% for OCUA] • The system rewards those that stay in the office seeing patients and doing procedures • Group size is critical to survive in the future A Minimum size is required to keep the office busy,support ancillary services,afford capital expenditures,take economic risk You must develop ancillary services and learn to leverage your time

31. Physician Assistant Gordon R Gluckman,MD Residency Director Northwest Metropolitan Urology Associates Rosiland Franklin Phycisian Assistant Program

32. Physician Assistant • Background • Navy corpsmen trained in Vietnam with considerable medical treatment • Shortage of primary care physicians • Duke University - 1965 • Director – Dr. Eugene Stead • Based on fast-track WWII physician training

33. Physician Assistant • Current Education • Typical Applicant • Bachelor’s degree • 4 years of experience • Extremely Competitive • Nurses, EMTs, Paramedics • Females>Males

34. Physician Assistant • Practicing PAs • Graduate of Accredited program • Must pass National Certification Exam “C” • 62% females • Final Degree • 44% Bachelor’s • 35% Master’s

35. Physician Assistant • Areas of Practice • Family/General medicine(27%) • General Internal medicine(7%) • General Pediatrics(3%) • OB/GYN (2%) • Surgery/Surgical specialties (25%) • Emergency medicine (10%) • Internal medicine specialty (11%) • Dermatology (3%)

36. Physician Assistant • Why Hire?? • Shift physician workload • Handling routine office visit, rounds, call • Less time in office • Flexibility • Cost Effectiveness • For every dollar generated by PA 28 cents cost to employer • Physician-PA team concept

37. Northwest Metropolitan Urology Associates • 16000 patient visits • 4500 hospital consults • 4000 hospital patient rounds • 2500 post operative visits

38. Northwest Metropolitan Urology Associates • 150 nephrectomies/laparoscopic • 400 TURP’s/Lasers • 200 open/robotic prostatectomies • 700 TRUS/BX • 400 Urodynamics

39. Northwest Metropolitan Urology Associates • Physician Assistant • Hospital rounds • Consults • OR assistant • Calls • Help in office

40. Northwest Metropolitan Urology Associates • One year residency • Lectures/OR/rounds/office • Two programs in the country

41. Physican Extenders James C. Ulchaker MD FACS Co-Director Prostate Center Glickman Urological and Kidney Institute Cleveland Clinic Foundation

42. What are APN’s? • Master’s prepared registered nurses • Current certification • Certificate of authority from OBN • Certificate to prescribe • Function in collaboration with physicians to provide mid-level care

43. Titles of APN’s • Nurse Practitioners (CRNP) • Certified Nurse Midwives (CNM) • Clinical Nurse Specialists (CNS) • Certified Registered Nurse Anesthetists* (CRNA)

44. Standard Care Arrangement • Required for CRNP,CNS,CNM (ORC) • Formal document of collaborative relationship • Must be kept on site • Reviewed and signed annually • Must be kept current

45. APN Core Privileges • Patient assessment: History & physical • Develop plan of care: • ordering diagnostic tests & therapies • medication management with CTP • Implement/ re-evaluate plan of care: • perform diagnostic tests as per privileging

46. Why hire an APN? • Promote access • Cost effective provider • Focus on prevention & wellness, patient education, promotion of compliance • Enhance revenue • Continuity of care • Facilitate physician productivity

47. Optimal Use of APN’s • Outpatient Setting Established patients Pre-op assessments Post-op visits • Inpatient Setting Patient evaluation Facilitate discharge planning Promote patient satisfaction

48. Reimbursement of APN’s • Independent • Incident to • Shared service in hospital setting

49. Facilitating APN Reimbursement • Provider enrollment packet • Medicare • Medicaid • BWC • Masterfile form • PIF for managed care enrollment • Processed once privileging is complete

50. Measuring APN Value • Patient Satisfaction: QDM • Requires EPIC provider number & billing number • Requires APN to have own schedule • Patient Outcomes • LOS, discharge times, re-admit rates, compliance with standards of care